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Published: Sep 30, 2020 5 min read

Borrowers with 700 credit scores were quoted an average rate of 3.533% to secure a 30-year fixed-rate purchase mortgage on Tuesday, according to Money's daily survey of over 8,000 lenders across the United States. At this credit score, roughly the national average, the rate for a 30-year refinance was 4.466%. Our rates include discount points and are for borrowers putting 20% down.

30-year fixed-rate purchase mortgage
Rate of September 29, 2020

Borrowers in Washington, D.C. were quoted the lowest mortgage rates on Tuesday — at 3.35%. Those in Nevada saw the highest average rate at 3.769%. Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 3.036%, while those with credit of 640 or below were given rates of 4.747% — a 1.712 percentage-point spread.

You may be able to negotiate a lower rate if you shop around or if you have other accounts with the lender. (Money's picks for the best mortgage lenders are here.) Currently, some banks are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.

Freddie Mac's widely quoted Primary Mortgage Market Survey put rates at 2.90% with 0.8 points paid for the week ending September 24. The mortgage purchaser's weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.

Refinance rates today

Money's survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.728% on Tuesday. Last September, the average mortgage rate (including fees) was 3.922%.

30-year fixed-rate mortgage refi
Rate of September 29, 2020

A homeowner with a $200,000 mortgage balance currently paying 3.922% on a 30-year loan could potentially cut their monthly payment from $946 to $924 by financing at today's lower rates. To determine if it's worth it to refinance your mortgage, also consider the closing fees you paid on your current mortgage, how much your new lender is charging and how long you have left on your loan term. (Our picks for the best lenders for refinancing are here).

What else is happening in the housing market right now?

The total volume of mortgage loan applications decreased 4.8% for the week ending September 25, according to the Mortgage Bankers Association. Purchase loan activity was down a seasonally adjusted 2% week-over-week, while refinancing loan activity was down 7%. Both types of loans, however, remained well above 2019 levels, up 22% and 56% respectively. Refinance loans made up 63% of all loan activity.

"There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans, and that could explain last week's decline in refinances," said Joel Kan, associate vice president of economic and industry forecasting for the MBA. "Many lenders are still operating at full capacity and working through operational challenges, ultimately limiting the number of applications they are able to accept."

Meanwhile, annual home prices continued to rise during the month of July. National home prices registered a 4.8% increase year-over-year, according to the CoreLogic Case Shiller National Home Price Index. Home prices had an annual gain of 4.3% during the month of June. The 10-city composite index posted an annual gain of 3.3%, up from 2.8% in June, while the 20-city composite index posted an annual gain of 3.9%, up from 3.5%. Phoenix led the way with the highest year-over-year increase, at 9.2%, followed by Seattle at 7.0% and Charlotte, North Carolina 6.0%.

"In previous months, we've noted that a trend of accelerating increases in the National Composite Index began in August 2019. That trend was interrupted in May and June, as price gains decelerated modestly, but now have resumed," said Craig J. Lazzara, managing director of the S&P Dow Jones Indices. "Obviously more data will be required before we can say with confidence that any COVID-related deceleration is behind us."


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